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Markets Pulse

Asian Shares Gain

Asian markets gained Monday, with stocks climbing on hopes for a resolution to the U.S. fiscal cliff, while sustained weakness in the yen helped the Japanese market hit a two-month high.

Stocks across the region advanced in early trading, as market sentiment improved on the back of positive comments by lawmakers in the U.S. about talks relating to the fiscal cliff. House Speaker John Boehner described the talks as “very constructive,” which helped Wall Street reverse early losses Friday to end the session in positive territory.

Fears surrounding the coming tax hikes and spending cuts, scheduled to occur at the beginning of 2013, have weighed on stocks across the world recently, with the MSCI Asia ex-Japan index falling 3.2% over the last seven sessions.

Regional currencies were also higher: the Australian dollar was at US$1.0368, compared with US$1.0336 late Friday, while the U.S. dollar weakened against South Korea’s won, with the greenback at 1087.9 won from 1092.2 won.

Despite a strong start to the session, the U.S. dollar also weakened slightly against the yen. The dollar had touched a seven-month high of ¥81.59 in early trading before quickly moderating back to ¥81.27.

The recent retreat in the yen was due to expectations that the Liberal Democratic Party will win the coming elections and implement aggressive monetary easing. The U.S. dollar advanced 2.3% against the yen last week, its best week since February.

Sustained weakness in the yen continued to bolster Japanese stocks, with the Nikkei Stock Average rising 1.4% to 9153.20, after touching 9183.46 earlier, its highest level since September 20.

Another mover in Tokyo was Japan Tobacco, which jumped 6.5% after the Japanese government said late Friday that it would postpone its planned sale of a part of a stake in the company due to market situations and the political situation.

In Hong Kong, the Hang Seng Index was 0.5% higher at 21262.06, though Ping An Insurance (Group) dropped 1.9% after HSBC said it was in discussions over the possible sale of its stake in the Chinese insurer; while food company Tingyi dropped 1.5% after releasing its third quarter results.

Kunlun Energy, an oil and gas company majority-owned by PetroChina, added 3.1% in Hong Kong after becoming the fiftieth member of the Hang Seng Index.

In China, the Shanghai Composite Index added just 0.1% to 2016.98.

The next data point for China is preliminary manufacturing data for November, which is scheduled to come out on Thursday.

Australia’s S&P/ASX 200 was up 0.6% at 4361.40.

In Sydney, sports fashion retailer Billabong International soared 10.1% amid renewed takeover hopes, as the head of the company’s Americas division said he has stepped aside from his role to explore the possibility of putting forward a proposal for a leveraged buyout of the company.